Endurance Acquires $235 Million Collateralized Cat Reinsurance

Bermuda-based Endurance Specialty Holdings Ltd. announced that its subsidiary, Endurance Specialty Insurance Ltd., has acquired $235 million of multi-year, collateralized catastrophe reinsurance from Shackleton Re Limited, a Cayman Islands reinsurance company. The bulletin said the “new reinsurance is designed to enhance Endurance’s ability to manage risk related to large natural catastrophes in the United States.”

It consists of three separate coverages, which the announcement detailed as follows:
— The first coverage is $125 million of reinsurance for earthquake risk in California over the next 18 months.
— The second coverage consists of $60 million of protection for hurricanes in the U.S. Northeast, Gulf Coast and certain inland states over the next two years.
— The final coverage provides $50 million of reinsurance for losses over the next two years resulting from hurricanes or California earthquakes following occurrence of a major hurricane or California earthquake during the same year.

President, Chairman and CEO Kenneth J. LeStrange commented: “These transactions provide Endurance with significant catastrophe reinsurance protection while continuing to optimize the use of our capital. The $235 million of new protection provided by this multi-year collateralized reinsurance, when combined with our existing capital, reinsurance and retrocessional protection, provides us with significant capital strength to provide for our clients and to continue to build our business.”

Endurance also explained that Shackleton Re “financed the reinsurance coverage through the issuance of a $125 million risk-linked catastrophe bond pursuant to Rule 144A under the Securities Act of 1933 and the entrance into a $110 million multi-year risk-linked credit facility. Goldman, Sachs & Co. acted as the initial purchaser for the catastrophe bond and as sole lead arranger, sole bookrunner, and administrative agent for the credit facility.”